Chrysler Recalls SUVs After Reported Fires

DETROIT, March 9, 2007; Kevin Krolicki writing for Reuters reported that
Chrysler Group said on Friday it would recall almost half a million
vehicles, including recent models of the Jeep Liberty and Dodge Durango
after reported fires and its new Dodge Avenger sedan because of faulty door
latches.

Chrysler said it took the action after receiving reports of dozens of
cases in which the Durango or the Liberty caught fire.

The sweeping recall of over 489,000 vehicles was the second such action
by Chrysler in two weeks. In late February, the U.S. automaker recalled
almost 51,000 vehicles to reprogram software for anti-lock brakes.

The National Highway Traffic Safety Administration had opened safety
investigations into the reported problems with both Chrysler-made sport
utility vehicles last year.

In two cases, Jeep Liberty drivers reported suffering minor burns
resulting from fires triggered by a problem with the blower motor in the
vehicle's air-conditioning system, a Chrysler spokeswoman said.

There were no injuries reported as a result of the Durango fires, and no
accidents had been reported as a result of the defects in either of the
vehicles, Chrysler said.

Chrysler, the struggling U.S. arm of DaimlerChrysler AG, said it was
recalling 328,424 of its slow-selling Durango SUVs because of the risk of
overheating linked to an integrated circuit in the instrument cluster of
the vehicles. The recall covers 2004 to 2006 model year SUVs.

Chrysler, which faces a possible sale by its German parent company, also
said it would service up to 149,605 Jeep Liberty vehicles because of a
problem with the blower motor in the air-conditioning system. Chrysler said
in some cases the motors could fail, particularly in hot weather.

That recall affects 2006 and 2007 model-year Jeep Liberty vehicles.

Chrysler had received reports of 12 fires involving the Liberty and 66
fires for the Durango, Chrysler spokeswoman Kristin Tyll said.

In a third move, the automaker also said it was recalling 10,994 of its
recently released 2008 model Dodge Avenger sedans because of a problem with
the door latches.

Chrysler, now the No. 4 U.S. automaker in sales, began making the
Avenger at its Sterling Heights, Michigan, assembly plant last month.

Chrysler said it would notify affected owners in all three cases.
Notices to Durango owners will go out in April, while owners of the Liberty
will be notified in May, it said.

Chrysler said it would notify owners of the Avenger once it had a
sufficient quantity of replacement parts for the vehicles.

In addition to the direct expense involved in a vehicle recall, the
safety actions can also be damaging to a brand's longer-term
reputation.

In recent years, Chrysler has undertaken a stepped-up investment in
vehicle quality that executives have said they expect to see reflected in
improved future quality ratings.

Chrysler, which lost $1.48 billion last year as sales slumped, is
cutting 13,000 jobs in an attempt to return to profitability by 2008.

A number of potential bidders, including private equity firms and
General Motors Corp. have expressed an interest in acquiring the automaker
after Daimler said last month it was keeping all options open for the
unit.

Taken together, the Chrysler recalls affected more vehicles than any
such action by a single automaker since Toyota Motor Corp. recalled over
550,000 Tundra pickup trucks and Sequoia SUVs in January.

"Obviously we would prefer not to do this, but we feel this is an
important part of our business," said Chrysler spokesman Max Gates. "So we
do this when we have to."

Gates also said consumers needed to look at more than a few months of
recall data to get an accurate sense of how brands were performing. "I
think it's important not to read too much into the short term," he told
Reuters.